VP Jagdeo dismisses claims of forex crisis
–measures announced recently aimed at curbing abuse
Contrary to what is being peddled in the media, Vice President Dr Bharrat Jagdeo has dismissed claims that Guyana is facing a foreign exchange crisis. Instead, he explained that the recent increase in demand is largely linked to massive capital projects being executed in the country.
Speaking at a news conference on Thursday, Jagdeo insisted that the country’s reserves and inflows remain strong.
The vice president said companies are borrowing more from local banks to finance the procurement of equipment; this has pushed the demand for demand foreign currency, temporarily.
“Once those projects are finished, the demand goes down,” he told reporters at the Arthur Chung Conference Centre (ACCC).
According to him, the savings will also come down when the landmark Gas-to-energy (GTE) projects comes on stream, since Guyana will be able to produce its own energy and supply cooking gas locally, which will then decrease imports.
This, he said, will allow Guyana to “have more foreign currency coming in and less going out,” stressing, “That is why this talk about a crisis is nonsense.”
Dr Jagdeo also dismissed the idea of capital flight, reasoning that Guyana continues to see strong inflows because of the many opportunities available in the economy.
At the same time, Jagdeo raised concerns about abuses of the system by some non-Guyanese entities who are exploiting Guyana’s liberal exchange market to buy U.S. dollars and funnel it abroad.
“We have non-Guyanese entities using our free floating system to access foreign currency here and then taking it abroad to meet their own demands. That cannot continue,” he stated.
That is why the nine measures announced by President Dr Mohamed Irfaan Ali on Tuesday are being implemented, to ensure companies submit invoices for large foreign currency transactions.
“If you don’t have the invoice, you’re not going to get it,” Jagdeo said bluntly, making it clear that “this will not apply to small businesses or individuals.”
He cited cases where some foreign-owned supermarkets operating in Guyana were not even registered with the local tax system yet were using the banking system to access large sums of foreign currency.
“We can’t allow that. This is about protecting our system and ensuring fairness,” Jagdeo made clear.
He emphasised that the government is determined to keep the system free and accessible to legitimate businesses and individuals while cracking down on loopholes that undermine tax compliance and foreign exchange stability.